Deal of the Week: Building starts to bustle

1of2Sugar Creek on the Lake, a 515,152-square-foot building at 14141 Southwest Freeway, is adding tenants. It was built in the 1970s.

2of2PM Realty Group announced leasing activity at Sugar Creek on the Lake, a 515,152-square-foot office building at 14141 Southwest Freeway. PM Realty Group purchased the building with capital partners PCCP and Fuller Realty Partners in September 2012.

After three years of being largely vacant, the former Unocal building on 15 acres at 14141 Southwest Freeway in Sugar Land is getting major upgrades and attracting new tenants.

Owners PM Realty Group, PCCP and Fuller Realty Partners are more than halfway through a $17 million program aimed at making Sugar Creek on the Lake a premier address for companies that want sprawling floor sizes - more than 60,000 square feet each - and a lakeside setting. The 515,152-square-foot building has a stepped design that goes from six to eight to 10 stories.

"Our strategy has been to really locate companies seeking a unique corporate headquarters," said Brad Sinclair, executive vice president, leasing, at PM Realty Group. "We've also got excellent access to the Sam Houston Tollway, which is crucial for large employers in the Greater Houston area."

Leases by UnitedHealthcare and Wholesome Sweeteners recently have boosted occupancy to 60 percent, PM Realty Group said. Money Management International was the sole tenant, taking up 20 percent, when the partners bought the building in 2012.

In November, UnitedHealth Group relocated operations related to its UnitedHealthcare and Optum businesses to four floors totaling 193,466 square feet. Of just over 2,000 Houston-area employees, about 800 are in the new Sugar Land office.

The new workspace provides better opportunities for collaboration and alignment among business segments, UnitedHealth Group said. The company has ties in Sugar Land through the OptumRx prescription service center that opened in 2012 and the Activiate4Kids childhood obesity program in partnership with Fort Bend Independent School District.

Bruce Rutherford and Cliff West with JLL represented UnitedHealthcare in the lease.

Wholesome Sweeteners, a supplier of organic sugar, honeys, agaves and syrups, recently moved into 19,021 square feet for relocation of its Sugar Land headquarters. The company employs under 100 people and was represented by Valerie Dieterich and Steve Biegel with Studley in the lease.

Sugar Creek on the Lake, which was built for Kaneb Services in the 1970s, has historically been a single-tenant building. It served as the regional headquarters for Unocal Corp. for more than 20 years before the company was acquired by Chevron in 2005. When Chevron relocated its employees to downtown, Fluor subleased several floors in the building before moving out in May of 2010. In October of 2010, Money Management International moved in.

The building went back to its lender in late 2010, but the surface parking lot was not part of the foreclosure. That made it hard to lease.

The owners, after acquiring the adjacent surface lot, are adding 870 parking spaces, including a small garage.

Other work consists of new heating and cooling systems and an energy management system, modernizing the elevators, restroom renovations, reglazing the windows and waterproofing.

PM Realty Group envisions ultimately having five to seven companies in building, which is along U.S. 59 between Sugar Creek Boulevard and Williams Trace.

Michael Sieger and Brad Sinclair of PM Realty Group are handling leasing.

With 205,000 square feet remaining to be leased, Sugar Creek on the Lake accounts for 36 percent of the Class A space available in the Sugar Land market, PM Realty Group said. Not counting the building, the occupancy rate in Sugar Land stands at 91.6 percent.

The site is big enough to accommodate more buildings.

"We have that option but no formal plan on it yet," Sinclair said. "We've talked to several groups about build-to-suit opportunities."

Katherine Feser covers a variety of subjects for the Houston Chronicle Business section. She coordinates some of the paper's most popular special sections, including the Chronicle 100, Home Price Survey, and Top Workplaces. She compiles many of the staples of the section, including the daily markets page, People in Business, event listings and real estate transactions.